Articles

As I look ahead to the coming New Year and a new decade, I am prompted to pause and reflect upon an eventful and productive 2019. At Mansour Gavin, we not only consider and appreciate all that we accomplish for our clients, we are thankful for the diverse contributions of time and effort from many of our lawyers to make Greater Cleveland a better place. In addition to providing effective legal services, we encourage our lawyers to be servant leaders in the community. I am proud to say that Mansour Gavin has a number of servant leaders who are not only great lawyers, but are committed citizens who spend countless hours volunteering in the community and participating in public service.

Just consider:

Service to our community is as valuable as service to our clients. This year, we designated Providence House to receive a special gift from the firm to support all of their incredible work for children in need.

This Holiday Season, I am grateful for the special opportunities to represent clients from all around the globe and for the special privilege of leading the great lawyers at Mansour Gavin who work so well to advance the interests of our clients, our community, and our profession.

I wish you and your families the best of health, happiness, and prosperity in this Holiday Season and the New Year as we enter the third decade of the 21 st Century.

Regards,

Anthony J. Coyne
President of Mansour Gavin

Communication: “Who gets the china?” (OK, but who actually wants the china?)

By:  Dan McGuire

This is part 2 of a series breaking down the process of helping clients set up their Wills by breaking the issues down into smaller, individual topics, enabling the adviser and client to take the necessary steps, and get the plan moving.

People generally think that their family will not fight over anything after they die. That may be the case in a lot of situations, but in others, long dormant rivalries and issues suddenly surface. Perceived slights become the basis for litigation. A thoughtful approach to the estate plan can minimize that risk. The key, of course, is communication, both with the client, and the client with his/her family.

Simply asking family members what each would like to receive, or expects to receive upon the client’s death, can mitigate many issues. Without those conversations, the client may be wrestling with deciding who should get the painting in the dining room when no one really wants it in the first place. That may be heartbreaking to the client but knowing in advance may allow the client to find someone who really would appreciate getting it. In fact, family members may want things the client never even considered such as holiday decorations, old gifts from the child that the client may still have but forgotten the source, or other items that may hold sentimental value to a particular family member. It is also better for the client to find out in advance that more than one person has set their sights on one specific object!

Often, part of the initial discussion with a client who wants to start defining the estate plan involves giving the client homework: “Talk to your family and find out what THEY want from you.”

Our next topic will be a discussion of how to address the distribution of the personal property the client has discussed with the family.

Our attorneys are always ready, willing and able to meet and discuss all of those questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small bites, the problem that used to lead to procrastination and uncertainty has been addressed and resolved. Learn more about Mansour Gavin’s Estate Planning & Probate group.

By: Brendon Friesen

Copyright law immediately protects a creator’s original work once reduced from a mere idea to a “medium of expression” such as artwork, novels, photography and video. Among other rights, the creator has the exclusive right to copy it. While copyright exists at common law, if you want the full protection and remedies offered by the U.S. Copyright Act you must deposit your work with the Copyright Office and pay a fee. Many do not take that extra step to protect their original work.

The Supreme Court shook the copyright world on March 4, 2019 with its decision in Fourth Estate Public Benefit Corporation v Wall-Street.com. Justice Ruth Ginsberg issued the decision, finding that copyright owners must register their copyright with the U.S. Copyright Office before bringing a lawsuit to stop infringement. Prior to the Fourth Estate decision, Circuit Courts were split on the issue – some of which allowed copyright owners to apply for registration at the time of filing the lawsuit. The wait-and-see approach became common practice and, according to Justice Ginsberg, defeated the purpose of the Copyright Act and intent of Congress. The Court believed that forgiving the failure to register de-incentivized copyright owners to take the required steps to register their copyright at, or before, the time of publication. The decision, while perhaps consistent with the language of the Copyright Act, is problematic if you have not already taken steps to register your copyright. The current review period of the Copyright Office from submission to registration, assuming there are no problems faced in the process, can be months, not days or weeks. That is, the copyright owner must wait months to bring a lawsuit to stop an infringement.

What does this mean for you? That original work you created is always at risk of infringement. If you have not taken steps to register the copyright, given the Fourth Estate decision, you’ll be sitting on the sidelines before you can get in the game to defend your turf. All the while, the bad guys are cashing in on your hard work and just might get away with it for not more than a slap on the wrist. Also keep in mind that certain statutory damages, up to $150,000 for each violation plus attorney’s fees, are not available if the infringement occurred after publication and before your effective date of registration. So take that extra step and get your copyright registered with the U.S. Copyright Office.

By:  Josh Morrow

The long-awaited Ohio Supreme Court decision in Ohio Northern University v. Charles Construction Services, Inc., finally hit the books in the last quarter of 2018, sending a clear message to Ohio contractors that their commercial general liability (“CGL”) insurance policies likely will not cover damages caused by their subcontractors’ defective work.

Contractors were already made aware of their lack of CGL coverage for their own defective work, thanks to the Ohio Supreme Court’s ruling in the often discussed Westfield Ins. Co. v. Custom Agri. Sys., Inc. decision from 2012. However, the question arose in ONU as to whether the defective work of a contractor’s subcontractors could be considered an “occurrence” under the contractor’s CGL policy, thus deeming it a covered event. The Court held that the subcontractor’s defective work is not “fortuitous” and therefore not “accidental.” As such, the defective work was not a covered “occurrence” under the general contractor’s CGL policy.

The decision deviates from the position in the majority of states, which have found an event to be an “occurrence” pursuant to the general contractor’s CGL policy language. Time will tell as to how the Ohio legislature responds to the ONU decision, if at all. Until then, contractors should address the issue with their carrier and look to purchase a rider or other form of an endorsement to their current CGL policy in order to fill the gap in coverage.

Perhaps more importantly, contractors should also conduct thorough due diligence when selecting their subcontractors, ensuring only those subs who are qualified and reputable provide work. Significant and consistent on-site inspections should then follow once a subcontractor’s work commences.

While uncertainty remains as to the extent of the ripple effect caused by the ONU decision, one thing seems to be a given. The decision will impact Ohio contractors’ bottom line, as they will now be forced to address their subcontractors’ defective work purely out of their own pocket without the assistance of their carrier. Alternatively, contractor insurance premiums will likely rise in connection with any rider that may look to provide coverage for such work.  Contractors should consult with their insurance agents and lawyers regarding the impact of the decision, both short and long term.

By:  Katie Weber

A: It’s still not too late! Here’s the background: In Cuyahoga County, the County Fiscal Officer is responsible under Ohio law for the valuation of all real estate in its respective county. Real estate is reevaluated in two cycles, the sexennial reappraisal (every six years) and the triennial update (every third year between reappraisals). The key difference between these two reevaluation cycles is the scope and methodology. Although both use an analysis of recent comparable sales to set value on a parcel-by-parcel basis, the Sexennial Reappraisal requires all property to be personally viewed.

Proposed Value Notices were sent out in Cuyahoga County this past July that provided the new proposed value that was determined during the reappraisal. This notice should have provided a “Market Value” and an “Assessed Value.” The “Market Value” is defined as the price your property would likely sell for in an open and competitive market between a willing buyer and seller. “Assessed Value” on real estate is set at 35% of market value by the State of Ohio. Assessed Value is the value of taxable property to which the tax rate is applied to compute the amount of property taxes.

Cuyahoga County allowed informal appeals. However, regardless of whether an informal appeal was filed or the outcome of the informal appeal, property owners are entitled to challenge the tax evaluation through the formal appeal process with the Cuyahoga County Board of Revision. Tax Evaluation Complaints are accepted between January 1, 2019-April 1, 2019 for the 2018 tax year.

In order to successfully challenge an increased appraisal, evidence will need to be submitted that shows the property was reevaluated incorrectly. A recent sale that is below the reevaluation is strong evidence in addition to evidence regarding some form of damage or destruction that impacts the property’s value. Otherwise, a professional appraisal of the property may need to be done in order to have sufficient evidence to successfully challenge the reevaluation.

If you think that the county has incorrectly evaluated the value of your property, give us a call in order to discuss in more detail whether you could bring a successful appeal.

By:  Jen Horn

What happens if you’re a trademark licensee – and your licensor declares bankruptcy? The U.S. Supreme Court will finally be tackling that question in 2019, as it has agreed to hear the case Mission Product Holdings, Inc. v. Tempnology, LLC.

The issue before the First Circuit in Mission Product Holdings was whether a trademark licensee could take advantage of rights that were granted to intellectual property licensees under Section 365 of the Bankruptcy Code. Currently, trademarks are not included in the defined categories of “IP” that receive bankruptcy protection.

Under the Bankruptcy Code, if the debtor (the licensor) rejects an IP license, the licensee has the following options: it can (a) elect to treat the license as terminated, and file a proof of claim for damages, or (b) it can retain its rights to use the IP under the license for the term of the license, as well as any remaining renewal terms that are provided.

To date, lower courts have been split on whether a trademark licensee can continue to use the trademark regardless of a licensor’s bankruptcy filing. Some courts have ruled that it is not permissible, and Congress did not intend to protect a trademark licensee the same way that licensees of other forms of IP, such as patents, are protected. Other courts, though, have held in favor of the trademark licensee.

In re Tempnology ruled against the trademark licensee, with the First Circuit stating that the licensor should be released from any continuing obligations that would interfere with its reorganization. The First Circuit further ruled that it should be up to Congress to expand Section 365 of the Bankruptcy Code to include trademarks.

With the Supreme Court agreeing to hear the appeal, however, parties should finally receive guidance on what happens to a trademark licensee if a licensor rejects the license agreement because of a bankruptcy filing. Regardless of what the Court decides, the ruling is certain to have an impact on the rights and obligations of both trademark licensors and licensees. Stay tuned for updates!

Make it a New Year’s Resolution to Refresh

(or Finally Address!) Your Will

By:  Dan McGuire

Everyone talks about the need to get a Will done (or updated), but many people never take that next step. Perhaps it is the unwillingness to face our own mortality. Perhaps it is just a general lack of knowledge as to what “getting a Will done” involves that makes the individual procrastinate further. If we break down the estate planning process into smaller bites, it may be easier to understand what is involved, and to take that first step, and get the process moving.

Helping clients establish their estate plans is a process that requires diving into a lot of detail: family dynamics, the financial situations of our clients, and the financial situations of their intended beneficiaries, to name a few. It is not a simple “off the rack” solution. You can’t put a suit on someone who is not looking for one. And you certainly should not put one on someone who does not need one.

The main question for a client to answer in getting started in the estate planning process is: “What do I want to accomplish?” Fact finding and organization of thought is imperative. We live in a world of blended families; fast pace; “no time” to sit back and plan years ahead, let alone tomorrow’s activities. Everyone has these issues to address, and delay does nothing to prevent the potential for confusion, disagreement and pain. We assist our clients in defining their situation and goals and designing a plan to accomplish those goals. But that is not where the process ends. We must then implement the plan to ensure those goals are actually met.

Our first goal, then, is to help our clients define what they want to accomplish with their estate plans. As the process continues, our client’s needs and concerns are revealed and developed, which serves to directing the attorney to consider the relative benefits of each sort of plan that might be employed. Ultimately, the client must weigh the cost and benefits of each part of the proposed plan.

So, how does a client actually develop an understanding of what a Will does?

Let’s start with what probate “is” and what it covers. Probate courts cover a lot of subject matters, from the guardianship of minors or incapacitated adults to the process of administering the estates of those who have died, and many other specialized areas. Let’s focus on the administration of a person’s assets after death.

When a person dies, the assets that the person owned individually are what pass through the probate process. So, a car or bank account or house that is in the client’s sole name are included.

OK, then, what does NOT pass through the probate process? Property that does not go through the probate process includes (for example) property owned by the client jointly with another person. So, a bank account or house owned jointly by spouses is not a probate asset.  Similarly, an asset for which there is a beneficiary designation (such as an insurance policy, or IRA, or payable on death bank account) are not probate assets, because that “contract” with the insurance company or investment company or bank defines who is to get the property when the client dies.

When you take OUT the non-probate property, what is left is what is covered by the probate process. And THAT is what is covered by the client’s Will.  If there is no Will, it is distributed according to the state’s law of descent and distribution.

If you want to control who gets how much of all of that property, whether it is probate property or non-probate property, you need to revisit WHAT each asset is, HOW each asset is titled, and IF there is a co-owner, or a beneficiary designation. When all of that is assembled, the client has to determine if that is the plan the client really wants in place. If the answer is anything other than an unqualified “Yes!” then it is time to take action.

Our attorneys are always ready, willing and able to meet and discuss all of those questions, help you articulate your plan and goals, determine the best plan to accomplish them, and then implement it. You will find that, by taking those small bites, the problem that used to lead to procrastination and uncertainty has been addressed and resolved.

By:  Jen Horn

When the European Union’s General Data Protection Regulation (GDPR) was introduced in May, one of the biggest questions was how the law was going to be enforced. The GDPR, which also applies to any U.S. company that handles the personal data of EU citizen, requires businesses to clearly state when they’re collecting personal data and ask for users’ consent in doing so. Many believe it will have implications for future data privacy rules in the United States as well. So far, it looks like the law is being taken seriously – regulators across the EU have already begun imposing fines.

Article 83 of the GDPR authorized data protection authorities (DPA) in EU member states to impose fines of up to approximately $22 million USD, or 2% of a company’s worldwide revenues, or, for serious violations, up to approximately $45 million USD, or 4% of a company’s worldwide revenues. However, Article 83 also required that fines had to be “effective, proportionate, and dissuasive.” The somewhat vague language left many companies wondering how large, exactly, the fines might be.

Their first example came in September, when the Austrian DPA fined the owner of a gambling shop because a camera at its front entrance also recorded footage of a public sidewalk. Interestingly, the Austrian DPA found this was a violation of the GDPR because it was considered a prohibited monitoring of public space. The fine, however, was approximately $5,000 USD plus legal costs, and the Austrian DPA acknowledged that the fine was meant to be “proportionate” to the violation.

A hospital in Portugal, however, was not quite as lucky. News was released in October that the unnamed hospital received a fine of approximately $455,000 USD for two separate violations. The first involved patient information that was found to be inappropriately available to non-medical staff; the second concerned the confidentiality and integrity of treatment systems. This is one of the highest fines imposed to date, and the hospital has stated it is appealing the penalty.

Most recently, a German chat platform was fined approximately $91,000 USD for a breach of user passwords that occurred in July. User information and passwords were stored in unencrypted plain text, and hackers managed to gain access to more than 800,000 email addresses and more than 1.5 million user names and passwords, some of which were later published on the Internet. Fortunately, the company’s handling of the event appears to have helped reduce the amount of its fine; the DPA report noted the company’s fast communication of the incident to its users, as well as its total cooperation with the DPA.

So what can this tell us about how the GDPR will be enforced? In sum, it appears that the law will be enforced fairly – but broadly. If a DPA is willing to impose a fine, however small, for a camera that captures too much of a public sidewalk, that’s a sign that the EU is serious about improving data privacy and security for consumers. Just as important, though, is that it also appears a company’s quick and comprehensive response to learning about an issue could lessen the amount of its fine.

By:  Jen Horn

Q:       I keep hearing about various data privacy regulations being passed, but my company does not do business overseas. Should I still be thinking about doing anything, and if so, why?

 A:      Yes, absolutely! The General Data Protection Regulation (GDPR) that took effect in May arguably has gotten the most press because of its global reach and implications. But just because your business doesn’t operate on a global scale doesn’t mean that you shouldn’t be proactive in addressing data privacy and/or cybersecurity issues.

First and foremost, as discussed in the article above, Ohio recently approved legislation that will provide a legal incentive for businesses with a cybersecurity program meeting certain criteria. Because data breaches and cybersecurity issues have unfortunately become a matter of when, rather than if, the smartest thing you can do is make sure your company has a plan in place. And if you already have a plan in place, make sure you set aside time annually, at a minimum, to review and update it in order to ensure compliance.

Ohio isn’t the only state taking measures to address data privacy and cybersecurity issues, however. California also passed legislation, the California Consumer Privacy Act of 2018 (CCPA), at the end of June. This new regulation, which is the first major data privacy law passed in the United States, will formally take effect on January 1, 2020. The CCPA gives “consumers” – defined as natural persons who are California residents for tax purposes – several key rights with respect to their personal information:

So why is the CCPA worth paying attention to? First, because it will affect an estimated 500,000 small to medium U.S. businesses – many of whom may not fall under the GDPR’s reach. But second, because California historically has been the first state to address privacy issues. In 2002, it became the first state to require notifications of data security breaches, and in 2004, it passed the first law requiring websites to have privacy policies. In other words, the CCPA could well be the first of many other state data privacy laws, or potentially even start the conversation on establishing national privacy legislation; it is a strong indicator of things to come.

Though the CCPA has been compared to the GDPR, don’t assume that being in compliance with GDPR means your company automatically complies with the CCPA – the two laws are not all that similar. For example, the CCPA defines “personal data” much more broadly, gives California consumers greater rights to access their personal data, and is stricter on data sharing for commercial purposes.

As things currently stand, the CCPA will apply to for-profit businesses that collect and control California residents’ personal information, do business in the State of California, and (1) earn $25 million or more in annual revenue; or (2) hold the personal data of 50,000 or more California residents, households or devices on an annual basis; or (3) obtain at least half its revenue selling personal data of California residents.

Penalties for noncompliance with the CCPA are divided into two categories: Intentional and unintentional. Intentional violations are $7,500 per violation; unintentional violations are subject to a $2,500 fine per violation. Additionally, companies could be ordered in civil lawsuits to pay statutory damages between $100 and $750 per California consumer and incident, or actual damages – whichever is greater – on top of any other court-ordered relief.

For now, it would be wise for any business to start paying attention to how Ohio’s law is implemented in November, and to watch for changes to the CCPA prior to its 2020 execution. Furthermore, if you haven’t already, start tracking all personal information you might collect, use, and store, and what your corporate privacy policy says about personal information. Being proactive and assuming that the CCPA could become law across the country could save you significant time in the long run

By:  Amy Kullik

In large part due to the #MeToo social media movement, the issue of workplace sexual harassment is trending. Now is the time for employers to ensure that they are in compliance with federal and state laws prohibiting workplace discrimination, including harassment.  Employers should have a solid harassment policy, training, and consistent enforcement practices, as set forth below:

“Employer” includes the state, any political subdivision of the state, any person employing four or more persons within the state, and any person acting directly or indirectly in the interest of an employer.

Consequently, employers should also ensure that their management-level employees and above are trained regarding their obligations to identify, report, escalate and investigate complaints of harassment.